Fortis Inc. Reports Strong Q3 2024 Financial Performance
Fortis Inc. (TSX/NYSE: FTS), a prominent player in the North American regulated electric and gas utility sector, has shared its financial results for the third quarter of 2024, revealing significant growth and operational success.
Financial Highlights
In Q3 2024, Fortis achieved remarkable net earnings of $420 million, equating to $0.85 per common share. This marks an increase from $394 million or $0.81 per common share compared to the previous year. The adjusted net earnings per common share also rose to $0.85, showing an increase from $0.84 in Q3 2023.
Capital expenditures reached $3.6 billion through September, and the company projects $5.2 billion in capital investments for 2024. Furthermore, Fortis unveiled a comprehensive capital plan for 2025-2029, totaling $26 billion, aimed at creating a robust infrastructure to support 6.5% average annual rate base growth.
"Our strong third-quarter results reflect the growth of our utilities as they continue to execute their capital programs," stated David Hutchens, President and CEO of Fortis. The announcement of a 4.2% increase in the fourth-quarter common share dividend from the Board of Directors demonstrates their commitment to providing shareholder value with 51 years of consecutive dividend increases.
Fortis has expressed a dedication to regulated growth strategies, aiming for annual dividend growth between 4-6% through 2029 while ensuring affordable energy for customers.
Net Earnings Breakdown
The corporation reported a net earnings increase driven by rate base growth and strong performance in Arizona, particularly from the Tucson Electric Power (TEP) with new customer rates applied as of September 1, 2023. Unrealized gains on derivative contracts during Q3 2024 and adjustments related to deferred income tax have also boosted earnings. However, the increase was tempered by higher holding company finance costs.
When looking at year-to-date figures, Fortis reported total net earnings of $1.2 billion or $2.45 per common share, marking an $85 million increase from the same period last year.
Adjusted net earnings remained stable without any adjustments for the three and nine months ended September 30, 2024. Previous years saw favorable adjustments related to natural gas derivatives and deferred income tax assets.
Capital Expenditure Insights
The projected rise in capital expenditures for 2024, up from the previously anticipated $4.8 billion, is attributed to factors including the Eagle Mountain Pipeline project at FortisBC Energy and fluctuations in the currency exchange rate. The Corporation's capital plan has been structured to support diverse utility projects, and the focus remains on delivering effective service in response to continued customer growth.
Additionally, the announcement of the Roadrunner Reserve 2 battery energy storage facility, at 200 megawatts, marks Fortis' significant step into renewable energy solutions. The project aims to serve approximately 42,000 homes and represents a considerable future investment.
Outlook and Future Projects
Fortis is actively positioning itself for ongoing expansion through its extensive five-year capital plan. This ambitious initiative will grow the company’s midyear rate base from $38.8 billion in 2024 to a projected $53 billion by 2029, promising a compounded annual growth rate of 6.5%.
Future growth prospects include enhancing the electric transmission grid, strengthening climate resilience investments, and the shift towards cleaner energy infrastructure to meet environmental goals. These initiatives are in direct alignment with Fortis’ targets to reduce direct greenhouse gas emissions significantly by 2030 and achieve net-zero emissions by 2050.
Fortis remains committed to achieving its corporate-wide target of reducing direct greenhouse gas emissions by 50% by 2030, and 75% by 2035, using 2019 as the baseline for evaluation.
Final Thoughts
In summary, Fortis Inc. has demonstrated robust financial health in its third-quarter results for 2024. With strategic capital investments and a dedication to sustainability, the corporation is well-positioned for future growth and continued support to its shareholders.
Frequently Asked Questions
What were Fortis Inc.'s net earnings for Q3 2024?
Fortis Inc. reported net earnings of $420 million for Q3 2024, or $0.85 per common share.
How much did Fortis Inc. project for capital expenditures in 2024?
The corporation projected capital expenditures of $5.2 billion for 2024.
What dividend increase did Fortis declare for Q4 2024?
Fortis declared a 4.2% increase in its fourth-quarter common share dividend.
What is Fortis' long-term outlook for earnings growth?
Fortis aims for annual dividend growth of 4-6% through 2029, driven by regulated growth and rate base expansion.
What are Fortis' targets regarding greenhouse gas emissions?
Fortis aims to reduce its direct greenhouse gas emissions by 50% by 2030 and achieve net-zero emissions by 2050.
